The agency is dead. Long live the agency.

We’ve been watching it since a couple years now. Design studios or agencies such as 8020, Sofa, Smart Design, Adaptive Path, Hot Studio, Gecko Design and most recently Teehan+Lax joining the ranks of larger product organizations such as Facebook, Google or Microsoft. The same happens on an individual talent level everyday.

The traditional agency model is dead, that’s the message.
But nothing is dead and nothing is going away.

While I do like to agree with it, there is a difference between physically dead and mentally dead. The traditional agency model is physically more than alive on a small scale, but mentally has been stagnating.

There is always enough work

The problem is not that there is not enough work, nor is it about the short term business growth of most small agencies. (which is excellent, I don’t think anyone can complain, yet…)

Though, most agencies will struggle to scale and create a high-margin business over time in case it keeps on operating the way it did in the past. There will always be enough low-margin work, the question is just if this matches up with your ambitions.

The reason why great talent is moving into more product focused environments is because most designers or engineers want to work on meaningful projects. Solving meaningful challenges and work on something they believe in with greater impact. Of course this is relative to each individual.

Most big challenges are solved in-house and it is extremely hard for service design agencies to tap into all the data & history needed to do their work properly.

But what’s exciting is that exactly here the shift is happening. Agencies are now tasked to find their own voice, build their own brand and craft their own vision. There has been always a lack of vision in most digital agencies because all they offered was their craft and expertise of execution. It’s like painting a car, but not building it.

Even if they tried to own more of the process it is almost impossible without becoming an integral part of the product organization. As long as great talent gets attracted by more meaningful work, the current agency model will have difficulties keeping them inside their system in the long run.

As a result agencies will experience high turnover, there fore a lack of consistent culture and ultimately will struggle to answer the simple question of “Where are we actually going?”

And isn’t this what we all want to know? Where are we going? What is our purpose? Why are we doing this?

I have many friends in agencies that I respect and I honestly believe they’re the most talented people I know. I believe in the agency model but I do see a shift happening. This article is not about what is better, agency or product company. It’s about where do you see yourself in the future.

Some people like to fuck around, some like to get married once in a while and some might have an open relationship.

It is hard because service design simply just says “Our purpose is our clients purpose” while pitching and jumping from one client brief to another. Now you would say, what’s wrong with having exactly the same purpose as the client? Nothing, but why are you not working directly with the client then?

There is no shortage for work in the service design industry, the question is just what kind of work do you want to do everyday? The challenge for digital agencies will be somewhere between finding their own voice and a solution of providing more meaningful work to keep the extraordinary talent.

There is no right or wrong here, it’s all just a matter of where you personally want to go in the future and what will help you getting there.

In the end we’re all just humans and depending on your priorities it will either come down to money, or personal fulfillment. Both can be found in product companies (which also can be your own) as well as agencies. It’s just a matter of managing expectations.

Some opt to take the golden parachute into big existing product companies and some chose to adjust the sails to get ready for a shift, while others create their own products.

PS: And the reason I’m writing this is not only because I experienced both agency & product myself, but also because I do like & see the value in both of them.

I kept this article as short as possible and I’m sure there will be a lot of discussion coming out of it. Feel free to tweet at me
@schneidertobias. If you enjoyed it, please hit the “Recommend” button.



Stories from the Desk of van Schneider written by Tobias van Schneider. New stories usually appear first on my private email list which you can sign up to at — Enjoy!

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